Cryptocurrencies can no longer be considered niche products, according to a new report from the International Monetary Fund (IMF), calling for comprehensive regulation of the industry.
According to a new report from the International Monetary Fund, over the past few years, digital assets have transformed from niche products to more mainstream products. For this reason, the IMF is calling on authorities to develop comprehensive policies to regulate emerging industries. The report states that cryptocurrencies are now a useful tool for cross-border transactions, speculative investments and hedging against weaker currencies. It added that the recent failures of virtual asset providers and the market downturn have driven regulators to formulate relevant cryptocurrency policies. However, the report’s authors do acknowledge that various hurdles make it difficult for regulators to develop appropriate oversight measures. The authors specifically mention the lack of viable skills for regulators, the rapid development of the market, and the difficulty of monitoring market activity.
Regulators have several priorities, and their resources are already stretched thin. Therefore, it is difficult for them to acquire skills and talents to keep pace with the development of the industry.
As has been argued many times, the report highlights the need for a consistent and coordinated approach by regulators across the globe to regulate the industry to create a unified regulatory framework. Many aspects of cryptocurrency regulation are not covered by traditional financial regulations, so regulators are advised to split policymaking among themselves. When taking a divisive approach, regulators can combine policies into a well-thought-out and comprehensive global cryptocurrency policy.
Comprehensive cryptocurrency regulation around the world offers various benefits to the cryptocurrency market. There will be order in the market, increased consumer confidence, restrictions on what is allowed, and an environment conducive to innovation flourishing.
Recently, global financial regulators have held various meetings on the best way to regulate the digital currency market. Europe is the latest country to settle its regulatory affairs and will publish the final draft of its much-anticipated Markets in Crypto Assets (MiCA) cryptocurrency policy within the next six weeks.
Disclaimer: This article is for informational purposes only. It is not intended or intended to be used as legal, tax, investment, financial or other advice.
